What is at stake, some may ask. Everything, we negotiate every day, knowingly or not. Be it about the added sugar in your coffee, whether you can borrow a buck from your friends, or if someone can lend you a pen. When it comes to business, you negotiate contracts, term sheets, employment agreements.(more…)
Back in 2018 I was presenting to the Chief Marketing Officer of Fujitsu on my human centered design innovation process. It worked great for digital products and MVPs but somehow it wasn’t landing. At about the halfway point of the presentation, the CMO asked a straightforward question. “How do I create the next iPhone?” I had no idea. What happened next was a series of questions that I believe led me to unearth at least a portion of Apple’s product innovation guidelines. If I’m right let me know, if I’m wrong, also let me know.
It all started with this:(more…)
As a founder, you should be keeping track of milestones, performance, sales and everything else that’s going on with your company, but you’re busy, being pulled in twenty different ways, you have to fundraise, you’re running all sales and marketing, it’s overwhelming. How can you make sure the company is healthy aside from just your MAUs, DAUs, retention, and sales going up. How can you benchmark your startup’s operating performance?(more…)
The Lean Startup model seems to be present everywhere you turn these days. As with any methodology that seeks to improve the success rate of young companies, it is welcome, and especially true when the new enterprise is needed more than ever to add kindling to the economic fire. However, after reading the book, I’m going to give you all this Lean Startup Book Review in a TL;DR. Eric Ries is largely selling 336 pages of obvious, while simultaneously making assumptions that would be effective in only a handful of startups, and surely not in an across-the-board situation as advertised.
As with any management ideology, there is of course both the good and the bad, so how’s about we take a quick look-see.(more…)
What can I say, I love trying out new apps, and I especially enjoy trying out new love location-based service (LBS) apps – except it is, when they get it completely and horribly wrong.
There’s little doubt that in the coming years location based services and augmented reality will shape the way we interact with our surroundings, search for products, and share information, and apparently a lot of other people think the same, which is why you tend to hear more and more these days about what’s hopping in LBS on your everyday tech blogs and in even more traditional media, i.e. the WSJ.
But this post isn’t about how great LBS is, it’s about how horrible some people make LBS. Forget Key Success Factors, let’s talk about Key Failure Factors or KFF’s.
What I mean by this is that mobile devices function in such a way that you have a need and then you use that device to fulfill that need. In the example of a photo, you see something cool, you snap that photo, and that need is fulfilled.
A few applications do an excellent job of fulfilling these needs, these applications are simple, they’re intuitive, and sometimes they can even even boas to be fun, and are growing at the rate of the plague in medieval europe. Unfortunately there’s only a handful of these at best, and the rest of the so-called LBS apps fall short of usability, they are in fact – painful – to use.
One such monstrosity is Whrrl, when started by Amazon veterans in ’07 was a forward thinking product indeed, but one that succumbed to what can only be explained as horrible execution. Why? Well it doesn’t make sense. It’s convoluted, it’s complex, it utilizes it’s own jargon that any new user has to learn, and best (or worst) of all, it has – get this – tutorials. Yes, tutorials.
Any phone application, or for that matter website that needs a “tutorial” is inherently flawed. Imagine – a google tutorial. You don’t need one because it’s just that simple to use. Remember web directories. They were fun to navigate weren’t they? And so now they’re done.
The user needs to “get” what’s going on from the moment they load the app / land on the page, if that user doesn’t “get” it within the first 15 seconds, chances or a repeat use / visit are slim to none. So ask yourselves objectively, if I were your regular tom dick or harry, how would I see this app. Would I get it?
If not, there may still be room to save the concept so fear not, here are a few simple ways to ensure that neither you, nor your product winds up as a jargon filled monstrosity understood only by the people who created it. :EXAMPLE:
The most important is. KISS – keep it simple, stupid, and the second is use design thinking, get everyone involved in the initial stages, but ensure there’s a goal and objective. Nothing worse than 40 cooks in the kitchen, and remember, the product should be understood by the technologically speaking lowest common denominator. In my case – my parents. If they get it. We’re good.
Let’s face it, the days of the IPO are over, the dot com IPO boom (there’s something that you probably haven’t heard in a while) was historically speaking a marvel, both for its rampant and somewhat unfettered investment in anything that housed a .com in it’s name, but also because a major planetary technology was reaching households around the world leading for companies such as Yahoo!, Google, and others to enter a relatively new space with global appeal.
IPO markets recovering, kind of.
While the IPO market did recover from 05-07 the relative amount of companies issuing public offerings was still nowhere at the level of the late 90’s, fast forward to 2009, and you’ve got 76 IPO’s worldwide, and while prospects look marginally better for 2010, this is by no means an indicator that we will see every Tom, Dick, and Harry issuing public offerings.
In fact it’s just the reverse, those companies that will make an IPO will typically be extremely specialized. The vast majority of current startups, simply put don’t have a strong enough business model nor product to do so.
Options outside of an IPO.
So what’s the option? This doesn’t mean that the entrepreneurship scene is dead, but with the credit crunch still firmly holding its grip over lending, investors being more cautious and no evident new market to exploit, entrepreneurs have to think of different and more creative exit strategies.
One such a strategy is acquisitions, large multinationals are the ones who have the cash to invest in new enterprise, and start-uppers need to identify those companies whose products and strategy would tie in well with the needs of their customers and whose own product are complimentary to those of the larger multinational.
This is not a new model by any means but one that has been employed and tested within the pharmaceutical industry for years, and is now being employed by hardware manufacturers and telephone companies among others.
Are you ready to sell?
But what and when is a company ready for such an acquisition? I would say that revenues in excess of €2m, would signal the possibility of an exit, but more than just revenues, the HR structure of the company, it’s growth potential, international reach, and scalability threshold of the company are possibly the most important factors.
Meaning, if said €2m/ annum company has 30 full time employees on it’s roster, and another 10-20 freelancers, it’s non agile (cannot respond to market fluctuations quickly), and has a stagnant revenue curve, well, Houston, we’ve got a problem.
Stagnant revenues aside, you may be asking yourself why HR is important, aside from the simple answer of wages digging into your cash-flows it also dictates that you’re revenue per employee is lowered.
Say we employ the 30 full time staff model, the revenue per employee will be €2m/3o = €66.6k per employee, just above the average salary, now if we’re to cut that number down to 10 full time staff the revenue per employee jumps to €200k, a much better metric indicator of company success.
In reality, you should always try to strive for a ratio of revenues to employees that will be on the plus side of €200k per person because.
1. You will have limited employment issues
2. You will be agile and portable
3. You will have a more flexible business
4. Your chances of selling your enterprise will be higher
5. You will have more time to spend on the actual business itself rather than HR issues
6. If you sell, your sale costs will be low due to simple due diligence
So whether you’re a company that’s out of the valley of death, or just starting out writing your business plan, be sure to assess your plans for an exit and ask yourself the following questions.
1. What is the market like now, and what will it be like in the next five years?
2. What sector am I in, and what overlapping sectors are in my market space?
3. Is / will my business be agile, and how can I make it more so?
4. What are the possible exit channels? VC, buyout, merger, etc…
5. Do you want to sell? And if so, how will you approach buyers.